Smartphone Users Are Willing to Pay for Privacy

Dec 17, 2013

A study conducted by the University of Colorado (CU) at Boulder showed that average smartphone users are willing to pay a few extra dollars for an application that won’t monitor their locations, contact lists, and other personal information.

The study, which surveyed 1,726 people in seven U.S. cities, found that a “representative consumer” is willing to pay $2.28 to conceal browser history, $4.05 to conceal contact lists, $1.19 to conceal personal locations, $1.75 to conceal the phone’s ID number, and $3.58 to conceal the contents of text messages. More experienced users who use their smartphones continually and for many purposes were willing to pay even more to conceal their contact lists and text messages.

Younger users are the most price-sensitive, but consumers of all types are willing to pay $2.12 to eliminate advertising on apps.

According to CU Professor Donald Waldman, one of the two economists who conducted the research, the smartphone is an ideal lens on privacy because it’s easy to see which kinds of privacy — or “permissions” — people give up. The study was funded by Engine Research Foundation, a nonprofit organization concerned with startup firms and public policy.